H Amdt 510 - Substitute Health Care and Insurance Law Amendments - National Key Vote

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Title: Substitute Health Care and Insurance Law Amendments

Vote Smart's Synopsis:

Vote to adopt an amendment to HR 3962 that replaces the text of the bill with the text of the amendment which amends various statues related to health care and heath insurance coverage, including, but not limited to, funding state health reinsurance and high-risk pool programs, payments to states that reduce average premiums and the number of uninsured, authorizing the establishment of Association Health Plans, and limiting non-economic and punitive damages awarded in a medical liability lawsuits.


Insurance Regulations

  • Requires states to have operational health care reinsurance programs or qualifying high-risk pool programs by January 1, 2010, and appropriates $15 billion for fiscal years 2009-2010 through 2018-2019 and an additional $10 billion for fiscal years 2014-2015 through 2018-2019 for this purpose (Sec. 101).
  • Defines a "qualified State reinsurance program" as a program operated by a state that provides reinsurance for coverage offered in the small group market on a prospective or retrospective basis, or on a basis that protects health insurers against annual aggregate spending of their enrollees and purchase protection against individual catastrophic costs (Sec. 101).
  • Defines a "qualifying high-risk pool" as a program that meets the following requirements (Sec. 101):
    • Provides at least 2 coverage options, 1 of which must be a high deductible health plan coupled with a health savings account;
    • Funded by a "stable funding source";
    • Eliminates any waiting lists so that all eligible residents can receive coverage through the pool;
    • Allows for coverage of individuals who would be eligible for Medicare if the 24 month disability waiting period was not applied;
    • Limits pool premiums to no more than 150 percent of the average premium in that state;
    • Provides for education and outreach initiatives; and
    • Covers preventive services and disease management for chronic diseases.
  • Specifies that only U.S. citizens and nationals are eligible to participate in a state high-risk pooling program, and requires states to provide certification that such requirement is being met in order to receive federal funding (Sec. 101).
  • Prohibits health insurers from placing annual or lifetime spending caps on any health insurance coverage or plan (Sec. 103).
  • Authorizes individuals to obtain an independent, third party review of a cancellation or nonrenewal of coverage due to allegations of fraud, and specifies that coverage shall remain in effect until the third party determines that the coverage may be cancelled or not renewed (Sec. 104).
  • Requires the Secretary of Health and Human Services to establish programs that make payments to states that have reduced their average health care premiums per capita in the small group and individual markets, adjusting for inflation and demographic considerations over time and based partially on the state's historic premium growth rate, and appropriates $35 billion over a nine-year period for this purpose (Sec. 111).
  • Requires the Secretary of Health and Human Services to establish programs that make payments to states that reduce the number of uninsured nonelderly persons, adjusted for unexpected fluctuations in population and excluding undocumented immigrants, and appropriates $15 billion over a nine-year period to this purpose (Sec. 111).
  • Authorizes states, no later than 12 months after the enactment of this Act, to contract with a private entity to develop and operate a plan finder website to provide information on the available health insurance coverage within the state, and specifies that a state may not operate a plan finder itself (Sec. 112).
  • Authorizes a private entity to operate a multi-state health plan finder in the same manner as a plan finder would be operated in a single state (Sec. 112).
  • Requires the Secretary of Health and Human Services to adopt a single set of operating rules for each of the following transactions (Sec. 113):
    • Health claims or equivalent encounter information;
    • Health claims attachments;
    • Enrollment and disenrollment in a health plan;
    • Eligibility for a health plan;
    • Health care payment and remittance advice;
    • Health plan premium payments;
    • First report of injury;
    • Health claim status;
    • Referral certification and authorization; and
    • Electronic funds transfers.
  • Requires the Secretary of Health and Human Services to rely on the recommendations of a qualified nonprofit entity when developing the aforementioned operating rules, and specifies that this nonprofit entity must meet the following requirements (Sec. 113):
    • Mission focus on administrative simplification;
    • Demonstrates an established multi-stakeholder and consensus-based process for development of operating rules, including participation from health care providers, vendors, relevant Federal agencies, and other standard development organizations;
    • Established public set of guiding principles that ensure that the operating rules and process are "open and transparent";
    • Coordinates with the HIT (Health Information Technology) Policy Committee and the HIT Standards Committee, and complements the efforts of the Office of the National Healthcare Coordinator and its related health information exchange goals;
    • Incorporates national standards, including the transaction standards issued under Health Insurance Portability and Accountability Act of 1996;
    • Supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory practices; and
    • Authorizes public review and updates of the operating rules.
  • Requires the Secretary of Health and Human Services, no later than April 1, 2014 and annually thereafter, to assess a penalty fee against health insurers for failing to certify and document compliance with the applicable standards and operating rules, and specifies that the fee shall start at $1 per covered life per day that the plan is not in compliance (Sec. 113).
  • Specifies that the non-compliance penalty fee shall increase annually based on the percentage increase in total national health care expenditures (Sec. 113).
  • Specifies that the non-compliance penalty fee shall be double the amount otherwise imposed if the health plan misrepresents information in a statement of certification or documentation (Sec. 113).
  • Specifies that the non-compliance penalty fee shall be limited each year to no more than $20 per covered life or $40 per covered life in the event that the plan has misrepresented information (Sec. 113).


Expanding Access to Coverage

  • Authorizes the establishment of Association Health Plans, beginning 1 year after the enactment of this Act, meaning a group health plan whose sponsor meets the following requirements (Sec. 201):
    • Established constitution and bylaws, provides for periodic meetings, and is organized and maintained as a bona fide trade association, bona fide industry association, bona fide professional association, or bona fide chamber of commerce for substantial purposes other than that of obtaining or providing medical care;
    • Established a permanent entity that receives active support from members and requires payment of membership dues; and
    • Does not condition membership, dues, payments, or coverage on health status-related factors or on group health plan participation.
  • Specifies that participants in Association Health Plans may be located in different states (Sec. 201).
  • Requires dependents be covered under a beneficiary's health plan at least through the dependent's 25th birthday and until the end of the coverage year on which that birthday occurs (Sec. 211).
  • Prohibits states from preventing employers from establishing auto-enrollment of health care coverage, as long as the employee is given notice and subsequently has the option to decline such coverage (Sec. 212).
  • Authorizes individuals to purchase health insurance coverage in another state and establishes interstate regulations pertaining to such purchases (Sec. 221).
  • Specifies that medical expenses incurred prior to the establishment of an individual's Health Savings Account are expenses that qualify for reimbursement through such account if the expense was incurred within 60 days of the effective date of the individual's health plan (Sec. 234).


Medical Liability Regulations

  • Requires individuals to file a medical liability lawsuit within 3 years of an injury or within 1 year of discovering the injury, whichever occurs first, unless one of the following conditions apply (Sec. 301):
    • Proof of medical fraud;
    • Intentional concealment of information; or
    • The presence of a foreign body in the injured individual that has no therapeutic or diagnostic purpose.
  • Specifies that there is no limit on the amount economic damages that may be awarded in a medical liability lawsuit (Sec. 302).
  • Defines "economic damages" as "objectively verifiable monetary losses" incurred by the plaintiff in a medical liability lawsuit (Sec. 307).
  • Limits non-economic damages awarded in medical liability lawsuits to a maximum of $250,000, regardless of the number of parties against whom the action was filed, and establishes a "fair share rule" in which liable parties are only responsible for paying damages in direct proportion to the party's percentage of responsibility (Sec. 302).
  • Defines "non-economic damages" as damages awarded for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, hedonic damages, injury to reputation, and all other non-pecuniary losses (Sec. 307).
  • Limits punitive damages awarded in medical liability lawsuits to a maximum of $250,000 or twice the amount of economic damages awarded, whichever is greater (Sec. 305).
  • Defines "punitive damages" as damages awarded for the purpose of punishment or deterrence, and not solely for compensatory purposes (Sec. 307).
  • Prohibits plaintiffs from demanding punitive damages upon initial filing of a medical liability lawsuit, but authorizes the plaintiff to file an amended plea for punitive damages if the court determines that there is a "substantial probability" that the plaintiff will be awarded such damages (Sec. 305).
  • Limits punitive damages to cases in which it is proven by clear and convincing evidence that the defendant acted with "malicious intent to injure" the plaintiff or "deliberately failed to avoid unnecessary injury" that the defendant knew the plaintiff was "substantially certain" to endure (Sec. 305).
  • Limits the factors in determining the amount of punitive damages awarded in a medical liability lawsuit to the following (Sec. 305):
    • Severity of the harm caused by defendant's conduct;
    • Duration or any concealment of such conduct by the defendant;
    • Profitability of the defendant's conduct;
    • Number of products sold or medical procedures rendered for compensation by the defendant of the kind that caused the plaintiff harm;
    • Criminal penalties imposed on the defendant as a result of the complaint; and
    • Civil fines imposed on the defendant as a result of the complaint.
  • Limits contingent fees charged by attorneys representing plaintiffs in medical liability lawsuits to the following limits (Sec. 303):
    • 40 percent of the first $50,000 awarded;
    • 33.33 percent of the next $50,000 awarded;
    • 25 percent of the next $500,000 awarded; and
    • 15 percent of any amount awarded in excess of $600,000.
  • Authorizes states to enact greater procedural or substantive protections for health care providers and health care organizations from liability, loss, or damages than those established by this Act (Sec. 309).
  • Authorizes states to enact laws that authorize compensatory or punitive damages in a medical liability lawsuit that are greater or lesser than the limits established by this Act (Sec. 309).


Various Other Provisions

  • Specifies that nothing in this Act shall be construed to interfere with the relationship between a doctor and patient (Sec. 401).
  • Repeals Section 804 of the American Recovery and Reinvestment Act of 2009 ("stimulus bill") that established the Federal Coordinating Council for Comparative Effectiveness Research (Sec. 402).
  • Authorizes health insurers to vary premiums and cost sharing of group health plans by up to 50 percent of the value of the benefits under the coverage based on participation in a standards-based wellness program (Sec. 501).
  • Appropriates $300 million to programs funded by the Health Care Fraud and Abuse Control Account beginning in fiscal year 2009-2010, and appropriates $100 million to the Office of the Inspector General of the Department of Health and Human Services for fraud prevention under Medicare and Medicaid for fiscal years 2009-2010 through 2018-2019 (Sec. 601).
  • Prohibits federal funds from being used to pay for abortions or cover any part of a health plan that includes abortion coverage, unless the woman is at risk of death without the performance of an abortion or the pregnancy is the result of rape or incest (Sec. 602).
  • Authorizes the Secretary of Health and Human Services to impose mandatory background checks on new Medicare providers or suppliers, charge an application fee, provide oversight over new providers or suppliers during an initial provisional approval period, and impose penalties for false statements (Sec. 604).
  • Requires the Secretary of Health and Human Services to coordinate with the Centers for Medicare and Medicaid Services to track providers and suppliers that have been banned from participating in the Medicare program due to activities in one state in order to ensure that they do not begin participating in Medicare in another state (Sec. 605).
  • Authorizes individuals to submit an application to license a biological product that is biosimilar to another product, provided that the individual submits the following information (Sec. 701):
    • Data based on clinical studies, analyses, and animal studies that demonstrates that the product is biosimilar to a reference product;
    • Evidence the biosimilar product works in the same way as the reference product;
    • Evidence that the biosimilar product will produce the same clinical results that had been previously approved for use in the reference product;
    • Documentation that the dosage form, route of administration, and strength of the biosimilar product are the same as those approved for the reference product; and
    • Documentation that the facility where the biosimilar product was manufactured, processed, packed, or held meets standards that ensure the product's safety, purity, and potency.

Title: Substitute Health Care and Insurance Law Amendments